Fact Check: Do 11 states have more people on welfare than are employed?

An email says that in 11 states more people are on welfare than are employed. And in all 11 states, there is a Democratic governor. It attributes the facts to Forbes magazine. Is this true?

This viral message originated after the Forbes article by William Baldwin, a contributing writer on investments, was published on Nov. 25. “Do You Live in a Death Spiral State?” advised readers not to put money in financially troubled states where people “dependent on government” outnumber those working in the private sector.

The “death spiral” states Baldwin listed were Alabama, California, Hawaii, Illinois, Kentucky, Maine, Mississippi, New Mexico, New York, Ohio and South Carolina.

Baldwin wrote: “If your career takes you to Los Angeles or Chicago, don’t buy a house. Rent. If you have money in municipal bonds, clean up the portfolio. Sell holdings from the sick states and reinvest where you’re less likely to get clipped.”

But, as FactCheck.org reports, Baldwin referred to “people dependent on government,” which has a whole different meaning than what the viral email calls “people on welfare.” Baldwin’s definition of those dependents consisted of employees who currently work for state and local government employees (not federal workers) and former workers who receive government pensions. He only counted Medicaid recipients as “people on welfare.”

None of the 11 states on Baldwin’s list, FactCheck.org notes, has more Medicaid recipients than employed folks, nor do they have more recipients of other forms of welfare, such as food stamps — officially, the Supplemental Nutrition Assistance Program (SNAP) — or Temporary Assistance for Needy Families — what most people think of as “welfare.”

Baldwin told FactCheck.org, a nonpartisan fact-finding project of the Annenberg Public Policy Center at the University of Pennsylvania, that what he stated in the Forbes article and what the email says “are not the same thing at all.”

Baldwin said he considered two things in compiling his “death spiral” list: a state’s credit-worthiness ranking according to an analysis done by the money management firm Conning & Co., and a state’s “taker/maker ratio,” which he calculated using figures from the Bureau of Labor Statistics, the Department of Health and Human Services, the Department of Agriculture and the Kaiser Commission on Medicaid and the Uninsured. It is that “taker/maker ratio” that’s been misrepresented in the email, FactCheck.org explains.

A “maker” is someone employed in the private sector, Baldwin said, while a “taker” is someone who draws money from the government, as an employee, pensioner or welfare recipient. To make sure he had an even playing field, he also added one person for every $100,000 of unfunded pension liabilities to the “takers” side. None of those details are included in the viral email.

FactCheck.org charted out the numbers supplied by Baldwin's sources — both the total number of employed and those employed specifically in the private sector — and confirmed that no state had more welfare recipients than the total number of those employed.

Now bear in mind that you can’t just add the numbers of welfare program recipients in any state and compare that to the total number of employees because there are many overlaps — people who receive both Medicaid and SNAP funds, for example.

So looking at California: it had 14,406,400 employed workers in November, with 12,046,700 in the private sector, according to the Bureau of Labor Statistics. The state had 1,412,397 recipients of TANF; 4,107,543 recipients of SNAP; and 7,367,600 who receive Medicaid. Clearly, none of the programs had more enrollees than those working, or even those working in the private sector. In fact, even if you added all the people receiving TANF, SNAP and Medicaid — which, as explained, would not be accurate because you’d be counting some people twice — they still wouldn’t equal the total number of workers.

Baldwin confirmed to FactCheck.org that his article doesn’t support the claim made in the email because he wasn’t comparing workers to welfare recipients. “I was comparing employment to government dependency,” he said.

He told FactCheck.org that there could be states with more “welfare” recipients than private-sector workers, but he didn’t know if that was the case. That would depend on what one counts as “welfare.”

It is also not true that all 11 states have Democratic governors. Six of the states have Republican governors: Gov. Robert Bentley of Alabama, Gov. Paul LePage of Maine, Gov. Phil Bryant of Mississippi, Gov. Susana Martinez of New Mexico, Gov. John Kasich of Ohio, and Gov. Nikki Halley of South Carolina.

If the purveyors of the viral email checked the facts before sending it, they could have spared area inboxes a lot more inaccuracies.

California has a population of well over 40 million people. This "Fact Check" says only 14M are employed, 20% of whom work for the government. Easy to see why they're broke; easier to see why successful, high-earners are leaving the state to avoid the super-high taxes needed to support the "other" 30M or so who aren't working.